Getting Rid of Anonymous Shell Companies Would Help Local Businesses

Anonymous shell companies tilt the playing field against small and local businesses. 

The most visceral example that Main Street Alliance’s members talk about is large multinational corporations using anonymous shell companies to minimize tax burdens, shifting all the tax burdens to smaller businesses.

For example, a multinational company could send all the actual profits from one location or one state to an offshore bank account owned by an anonymous shell company that gets listed as a “consultant” to the multinational company. In reality, the anonymous shell company and the corporation are one and the same, but on paper, no reported corporate profits mean zero corporate taxes paid.

Anonymous shell companies also play a key role in procurement fraud. Large government contractors, particularly in construction, can use anonymous shell companies to bid on opportunities meant for smaller contractors or even for minority- and women-owned contractors.

 

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